CMS Payment Adjustments for Medicare Providers

Posted May 19, 2021

Updated February 15, 2022

This notice is updated with new information on the Medicare sequester suspension period, which has been extended through March 31, 2022.

During the COVID-19 public health emergency, the Centers for Medicare & Medicaid Services (CMS) has adjusted certain payments to Medicare providers. Blue Cross and Blue Shield of Texas (BCBSTX) is applying these temporary adjustments to claims reimbursements, as appropriate and where consistent with network contracts, for Medicare Advantage providers.


What has changed?

Diagnosis Related Group (DRG) add-on payment: For discharges of members diagnosed with COVID-19, the weight of the assigned DRG has temporarily increased 20 percent. Providers should use the appropriate diagnosis code and date of discharge to identify members:

  • B97.29 (Other coronavirus as the cause of diseases classified elsewhere) for discharges occurring on or after Jan. 27, 2020, and on or before March 31, 2020.
  • U07.1 (COVID-19) for discharges occurring on or after April 1, 2020, through the emergency period.

Medicare sequestration suspended through March 31, 2022: The Medicare sequester suspension period has been extended through March 31, 2022 (previously was suspended starting May 1, 2020 and extended to Dec. 31, 2021). Through March 31, BCBSTX is suspending the 2% sequestration reduction in Medicare claims payments. This applies to Medicare providers who service Medicare Advantage members.

Sequestration reductions start April 1, 2022: As defined by federal legislation, the sequestration reduction will be set at 1% from April 1 to June 30, 2022. Sequestration reductions return to 2% starting July 1, 2022.



Please call the number on members’ ID cards.